Read Will's Commentary - Barrons: The Federal Deposit Insurance Corp. is planning to announce its decision on the sale of Silicon Valley Bank this weekend, Barron’s Advisor has learned. A person familiar with the FDIC’s plans indicates that the banking regulator hopes to present a resolution of the auction over the weekend.
Will and Adam provide an update on the continued fallout in the banking sector, including what it means for consumers and markets. The surprising rebound in technology stocks despite a nascent banking crisis is also analyzed and compared to what we experienced during the financial crisis. We also debate what the opposite of inverted is and why it is important to our outlook for the economy. For even more, click here to read Will’s comments on Silicon Valley Bank in Barron’s.
I recently accompanied my son’s class on a field trip to something called the Exploreum. As you may have heard, good things don’t end with “eum”. Although certain facets of the trip were quasi-educational, I did take umbrage at their comparison of “playing the stock market” to casinos and the lottery:
Formidable was founded in 2013 as a wealth management firm. Our CEO and founder, Will Brown, wanted to bring a differentiated, active approach to the RIA space. When developing client portfolios, we were unsatisfied with solutions we saw in the market, especially in the alternatives space.
Formidable Asset Management (“Formidable”) has closely followed Flux Power Holdings (NASDAQ: FLUX) as part of our fundamental research
We look at the self-proclaimed new Nasdaq, a.k.a., Ark, as emblematic of the ferocious return of speculation in 2023. We also look at the behavior of meme stock speculators and debate the role the Fed may or may not in fomenting speculation as it (and we) debate how restrictive policy is versus how restrictive it needs to be.
If you think our title sounds like an episode of the TV show Lost, you would be correct. Per Wikipedia, an always reliable source, “’”The Constant” is widely regarded as one of Lost's best episodes, and arguably the best episode of television produced in the 21st century.” I encourage one of our readers to edit this incredibly hyperbolic entry.
Will and Adam discuss the challenges faced by the Fed as it sees financial conditions easing despite its efforts to restrict monetary policy. We also analyze the health of the consumer in the world of high interest rates, low savings rates, and increasing levels of debt. The unprecedented collapse in money supply growth, and the recent spike in velocity, are addressed as well.
We are going to break this month’s update into two separate pieces. First, we will recap a dismal 2022. Then, we will provide our outlook for 2023, and in some ways, beyond. If you want a little more color, we encourage you to listen to our most recent podcast.
We review a challenging 2022, capped off by a December to forget for those looking for a Santa rally. The causes (Fed policy, rampant retail speculation) and effects (multiple compression, sizable capital losses) are analyzed, along with some perspective on how we are preparing for 2023.
